Question

Question 11 1 pts You want to buy a new sports car for $99.444. The contract is in the form of a 65-month annuity due at a 6.06 percent APR. What will your monthly payment (in $) be? Answer to two decimals.

Answer 1

Answer -

Calculation of Monthly payment -

Formula -

C / [1 - (1 + r)-n / r] * [1 + r]

Here,

C = Price of sports car = $99444

r = Annual interest rate = (6.06% / 12) = 0.00505

n = Number of payments = 65

Putting the values in the above formula we get,

= $99444 / [1 - (1+0.00505)^-65 / 0.00505] * [1+0.00505]

= $99444 / 55.5706861817

= $1789.50

Therefore,  Monthly payment = $1789.50.